Gymboree (GYMB) beats and raises

Despite the stock's lackluster after-hours performance, children's apparel and toy company Gymboree (NASDAQ: GYMB) reported earnings that beat Street estimates and raised its full year guidance after the bell.

For the quarter, Gymboree earned 19 cents per share on $182.4 million in revenues. These results, which demonstrated huge year-over-year growth, managed to beat the consensus estimate, which was looking for 15 cents per share on $180 million sales.

Additionally, the company increased its third quarter and full year outlook. Gymboree now expects to earn 84-87 cents per share in the third quarter, leading me to believe the company will be able to beat the current consensus estimate of 88 cents per share. For the year, the company expects to earn $2.50-$2.53 per share, an increase from its previous guidance of $2.42-$2.46 per share. Again, I think the full year consensus estimate of $2,55 per share should be rather easy to beat.

While it seems surprising at first that the stock sold off on this news, this seems like a classic "buy the rumor, sell the news" reaction. The stock rose nearly 5% during the day, presumably on whispers of a solid quarter, and the earnings report didn't bring in enough buyers to offset those who were closing their pre-earnings trades.